Tesla shares’ more than 100% rally since early March has pushed the company’s market cap up to a staggering $1.5 trillion – more than the valuation of every other American car company combined
But a former board member – Steve Westley – believes TSLA will be hard-pressed to replicate this outperformance, or will at least have to “bend over backwards” to deliver similar returns in 2026.
While investors are betting on breakthroughs in autonomous driving, Westley said even that could fail to sustain the upward momentum in Tesla stock next year.
Why it may be difficult for Tesla stock to push higher in 2026
Speaking with CNBC, Westley agreed that it’s hard to justify TSLA’s current valuation given 2026 could be its “second year of declining sales and shrinking profits.”
According to him, the multinational must move with urgency in securing regulatory approval for its robotaxis in cities beyond the two it currently operates in.
Without broader adoption, Tesla’s sales may stall even faster, making it difficult for investors to stick with it.
TSLA shares are currently going for a forward price-to-earnings (P/E) ratio of nearly 430, which makes it even more expensive than the likes of Palantir Technologies.
And it’s not like the EV company pays a dividend currently to incentivise ownership despite being egregiously overvalued.
Tesla is significantly behind Waymo in robotaxis
Billionaire Elon Musk has repeatedly touted Tesla’s autonomous technology as “superior” to its staunch rival, Waymo.
In a recent CNBC interview, however, Steve Westley suggested Waymo is far ahead of it in reality, given it “goes about 17,000 miles between critical interventions versus about 1,500 only for Tesla.”
This highlights the challenge TSLA faces in proving its selfless-driving tech is safe and reliable.
Moreover, Waymo has already penetrated some 20 markets and expects to deliver tens of millions of rides annually, while Tesla remains within the bounds of two cities only and still requires safety drivers.
The disparity underscores that Tesla shares have significant ground to make up before they can compete meaningfully in autonomous ride-hailing.
Robotaxi plans may not be enough for TSLA shares
Westley agreed that delivering full self-driving would be a “big step forward” for Tesla next year, but said the stock still “needs more”.
In his view, the company’s energy division could be “the real spark” investors are looking for.
That business grew from $10 billion last year to $14 billion in 2025 – “that’s 40% and they can keep up that growth.”
TSLA is becoming a major supplier of powerwalls, megapacks, and energy blocks for utilities – at a time when artificial intelligence (AI) and data centres are driving strong electricity demand.
This diversification positions Tesla not just as a carmaker but as a technology and energy company.
According to Westley, proving the scale of these offerings could be critical. While robotaxis may grab headlines, energy growth could provide the sustainable boost TSLA stock needs.
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